Agenda item

To consider a report by Councillor Barry Mellor, Lead Member for Environment and Transport (copy enclosed) seeking Cabinet’s support for the proposed way forward to complete the Phase 2 works at the new Waste Transfer Station in Denbigh, following the main contractor entering administration, and providing an update on a budget pressure resulting from that situation.

RESOLVED that Cabinet –

(a)       confirms that it has read, understood and taken account of the Wellbeing Impact Assessment (Appendix 2 to the report) as part of its consideration;

(b)       supports the preferred way forward to complete the Phase 2 works at the new Waste Transfer Station on the Colomendy Industrial Estate, Denbigh, and

(c)        acknowledge the latest budget pressure and agree to continue working at risk while discussions on potential sources of funding for the pressure were concluded with the Welsh Government.  This was necessary to mitigate the risk of further delays that would further impact on cost and programme, including affecting wider programme of service change for which completion of the Waste Transfer Station was critical.

Councillor Barry Mellor presented the report seeking Cabinet’s support for the proposed way forward to complete the Phase 2 works at the new Waste Transfer Station in Denbigh, following the main contractor RL Davies & Son Ltd (RLD) entering administration, and gave an update on the budget pressure as a result.

The Corporate Director: Environment and Economy and Corporate Project Manager attended for this item.  Cabinet was apprised of the background and latest position with regard to the Phase 2 works and four options on the way forward.  Option 4 had been recommended for DCC to continue to act as the Management Contractor which would essentially formalise the arrangements in place under the Exception Report that had enabled works to continue since late February 2023. The budget situation was set out with ongoing discussions with Welsh Government (WG) about whether they would address the latest budget pressure of £890,987. If WG were unable to fund the pressure, an options report would be brought back to Cabinet.

Cabinet discussed the report with officers and it was confirmed that completion of the works was essential to implement the service change.  The waste project was fundamentally about environmental improvement and increasing recycling rates to meet the 70% statutory target set by WG, who had also invested significantly in the project.  Cabinet welcomed the environmental benefits of the new waste model and new system of separating and recycling, and also noted the significant increasing cost of continuing with the current co-mingled recycling which equated to circa £75 per tonne together with the potential for WG fines if recycling targets were not met.  There was also a risk of WG clawback in the event the depot was not completed and the new service roll out did not proceed.  In noting the complexities with the project, Cabinet paid tribute to the work of the officers involved, and hoped for a positive outcome on discussions with WG regarding the budget pressure.

The Leader opened the debate to non-Cabinet members who raised questions and concerns around the financial implications of the project and budget pressure together with associated risks and future options.  Officers responded as follows –

·       confirmed the accuracy of the budget estimate due to the recent review of all work packages and built in contingency but there was always a risk of unknowns

·       the budget pressure had been caused as a direct result of the main contractor for the project going into administration which was outside the Council’s control

·       provided details of warranties and professional indemnities relating to the project

·       the project risks reduced as the works continued and progressed to completion

·       the delay in Natural Resources Wales issuing a licence to enable operation from the new depot remained a risk and members would be kept abreast of progress

·       discussions were ongoing with WG regarding funding the budget pressure and if they were unsuccessful there would be a report back on funding options/impact

·       gave assurances around project management, governance arrangements and risk monitoring with confidence that the project would be delivered

·       highlighted the opportunity for members to engage in the scrutiny of aspects of the service change and progress at scrutiny meetings in June and October and agreed to include the risks associated with the project as part of that process

·       set out how the contract award to RLD had been made via delegated authority given the impact of the local elections and timescales for awarding the contract.

At the close of debate, Councillor Gill German reiterated the fundamental reason for the new waste model was to address environmental concerns and tackle climate change and there was broad support for WG’s targets in that regard.  Councillor Barry Mellor referred to the Council’s Climate Change and Ecological Emergency Declaration in 2019 and its aims to which the waste project would contribute.

RESOLVED that Cabinet –

(a)      confirms that it has read, understood and taken account of the Wellbeing Impact Assessment (Appendix 2 to the report) as part of its consideration;

(b)      supports the preferred way forward to complete the Phase 2 works at the new Waste Transfer Station on the Colomendy Industrial Estate, Denbigh, and

(c)      acknowledge the latest budget pressure and agree to continue working at risk while discussions on potential sources of funding for the pressure were concluded with the Welsh Government.  This was necessary to mitigate the risk of further delays that would further impact on cost and programme, including affecting wider programme of service change for which completion of the Waste Transfer Station was critical.

At this point (11.10 am) the meeting adjourned for a refreshment break.